Press Release: State aid: Commission launches probe into state bail-outs of IKB and Sachsen LB

On 27 February, 2008, the European Commission opened under EC Treaty state aid rules an in-depth investigation into state support measures in favour of the German banks IKB and Sachsen LB. As a consequence of investments in US sub-prime markets, both banks ran into financial difficulties. During the summer of 2007, the state owned bank Kreditanstalt für Wiederaufbau (KfW) provided a risk shield of around €9 billion to IKB and a group of Landesbanken granted liquidity assistance of around €17 billion to SachsenLB. Without these and several subsequent measures the banks would not have been able to continue their business. The Commission has to assess whether these measures constitute state aid and, if so, whether they can be found compatible with EU rules for rescuing and restructuring firms in difficulties. The opening of an investigation is common for state interventions of this magnitude and gives interested parties a possibility to submit their comments. It does not prejudge the outcome of the procedure.